The cryptocurrency Bitcoin is designed to have a finite supply of 21 million BTC. What this means, unless there are drastic changes made to Bitcoin's supply mechanism, there will never be more than 21 million BTC in circulation.
At this time, around 18.6 million Bitcoins have been mined. This is about 88% of the maximum supply.
When owned, the cryptocurrency is stored inside wallets, which have their own address. And just like username-password combination that people tend to forget, many Bitcoin wallets are also forgotten as a result of a directly lost, negligence or plain misfortune.
Bitcoin owners need access to their private keys or recovery phrase to access their Bitcoin. And losing that access to the wallets will make the owners lose the ability to access the cryptocurrency they own.
And according to a report from blockchain analytics firm Chainalysis, around 3.7 million BTC hasn't been touched for at least half a decade.
In other words, around $40.6 billion worth of Bitcoin, or one-fifth of the total supply, may never be moved again.
Related: A British Man Accidentally Threw Away A Hard Drive Containing 7,500 Bitcoins
Detailing the numbers, Chainalysis reported that:
- About 60% of that Bitcoin is held by entities. and have never sold more than 25% of Bitcoin they’ve ever received. These Bitcoins are long-term investments.
- Another 20% hasn’t moved from its current set of addresses in five years or longer. These are considered lost Bitcoins.
- The remaining 3.5 million Bitcoins, or about 19% of all mined Bitcoin, moves frequently, primarily between exchanges. These Bitcoins are used for trading.
"The 3.5 million Bitcoin used for trading supplies the market, and, in interaction with the level of demand, determines the price."
Besides owners in losing their keys as the reason for the Bitcoin losses, Satoshi Nakamoto is also responsible.
The Bitcoin mysterious creator may have mined around 1.1 million Bitcoins in the first few months of its existence. Since then, Satoshi hasn't touched his stash. Owning around 5.9% of all Bitcoins, those Bitcoins by Chainalysis is considered "lost" because they haven't moved for more than half a decade.
Another reason is death.
Bitcoin owners who passed away may have brought their keys to their grave making their accounts inaccessible.
One example was when the 30-year old founder of Canadian cryptocurrency exchange QuadrigaCX died. He took with him the private keys to around $190 million worth of various cryptocurrencies, including close to 1,000 Bitcoins.
Then there are Bitcoins that are burned intentionally.
This happens when Bitcoins are sent intentionally to one of various 'burn addresses'. These are essentially Bitcoin vanity addresses with no known private key, meaning that any Bitcoin sent to this address is likely gone forever.
So far, more than 2,700 BTC have been sent to the more than 100 suspected burn addresses, removing around $30 million worth of Bitcoin from circulation.
